Resale is hot for back to school

Kate Smith was never one to rifle through the racks at thrift stores. But when she saw almost new high-end kids' clothes selling at steep discounts on online resale shop ThredUp, the mom of two felt she'd made a real back-to-school shopping find.

"I get their school shoes there, their winter coats, their boots," Smith, a real estate agent who lives in Chicago's West Town neighborhood, said of her 8-year-old son, Jack, and 6-year-old daughter, Emma.

"It saves on time and arguments" — and, of course, money, Smith said. She estimates that buying resale has cut her yearly spending on children's clothes in half, to $500-$750 from $1,000-$1,500. In one particularly proud purchase, she bought her son two Columbia winter jackets in perfect condition for a total of $20. She uses the savings to fund her kids' after-school activities, like swimming and snowboarding lessons.

Thrift and consignment stores were among the rare winners during the recession as shoppers pinched pennies, but even as the economy improves, the value-conscious mindset persists, business owners and industry watchers say.

That continued bargain-mindedness, along with the growing acceptance of sharing goods through services like home rental site Airbnb and peer carservice Lyft, plus the upgrading of resale to a like-new experience, helps buying used lose its stigma as a last resort to become a mainstream alternative.

"Under normal circumstances, you would say that an increase of consumer confidence in the economy would decrease the amount of shopping done here, but at the same time, there's been a shift in the consumer's way of thinking," said Ted Vaughan, a Dallas-based partner in the retail and consumer products practice group at accounting firm BDO. "If they've already made their first buy and are comfortable with the process and the quality of clothing, it starts to take hold, and it's not just a last option."

For back-to-school and back-to-college shoppers, who expect to spend $75 billion this year, resale is among several ways they are striving to get the most bang for their buck.

Though K-12 parents polled in the National Retail Federation's annual back-to-school survey said they expect to spend about 5 percent more this year than last, for an average of $670 per household. They also plan to do more comparison shopping online and on their smartphones, buy more generic and store-brand products and wait until the last week or two before school starts for last-minute deals, the survey said.

Traditional retailers have responded to shoppers' picky spending with aggressive back-to-school deals and big pushes in digital and social-media outreach, said Wendy Liebmann, CEO of WSL Strategic Retail. In today's environment, unless an item is dazzling with novelty — such as anything pegged to the movie "Frozen" — price rules, she said.

The appeal of resale lies not only in the good deals, but also in the unique items, Liebmann said.

The National Retail Federation's survey found that 13.2 percent of back-to-school shoppers said they planned to shop in thrift or resale stores this year, down from 18.2 percent in 2009. But Adele Meyer, executive director of NARTS: The Association of Resale Professionals, estimates the resale industry is growing 7 percent every year, with some 30,000 to 35,000 stores across the country. Growth is particularly high in resale shops for furniture and teen apparel, she said.

"A decade ago, teens wanted everything new and the same as everyone else, but now they embrace their uniqueness. They are looking for unusual things," Meyer said. "They put outfits together rather than just buy off the racks."

For many online and bricks-and-mortar resale shops, particularly those catering to kids and teens, August through October is their busiest season. Most Chicago schools start Sept. 2, while suburban schools start late August.

"We see a huge spike in incoming merchandise this time of year, and we see it go right back out," said Neil Abramson, co-owner of several consignment stores in New England, including Cutie Patuties for kids, Q-Teens and Cutiques for home furnishings. Resale is particularly well suited for children's apparel, he said, because they grow out of clothes constantly, requiring frequent affordable wardrobe refreshes while also providing a steady supply of barely worn duds.

Clothes aren't the only big resale sellers.

"We fly through desks this time of year," Abramson said, as parents set up work spaces for their kids.

Gazelle, an online site that buys and sells used electronics like phones and tablets, sees a surge in trade-in volume during August and September, not only because that's when Apple releases new devices, but also because parents and students want money back, to put toward the latest gadgets for the new school year, said Chief Marketing Officer Sarah Welch.

But clothes take the biggest bite of the back-to-school budget.

ThredUp, the San Francisco-based online resale and consignment startup the sells women's and kids' clothes and shoes, "was really born of the annual need moms have to put clothes on their kids," said Chief Marketing Officer Anthony Marino.

The 5-year-old company, which said it has close to 1.5 million members and 50 percent sales growth every quarter, highlights "back-to-school must-haves" and "Picture Day outfits" and offers a promotion that gives moms buying children's clothes 10 percent off to shop for themselves.

Smith, the mom of two in West Town, got involved with ThredUp first as a seller, to clear the bins full of old children's clothes she had accumulated in her closet. She then discovered that the site sells items only in "practically new" condition, many of them still with the original price tags. So she scrapped her annual trip to Target and Kohl's to save up to 90 percent on better-quality brands.

"There's stuff like Gymboree, which is a store I normally wouldn't go into because it's more expensive," Smith said.

Several online shops have cropped up in recent years with services to make resale easy and attractive. They send sellers bags with prepaid shipping labels and offer doorstep pickup, full money-back guarantees and, often, free return shipping. They have filters so shoppers can search by brand, size and style.

"We want to make buying used feel like buying new," said Noah Ready-Campbell, co-founder and CEO of Twice, a 2-year-old San Francisco-based online resale startup. Twice, which has $23.1 million in funding, has invested in eight photo studios to ensure clothes and models are showcased appealingly.

At Moxie Jean, an online kids resale site based in Arlington Heights, co-founder Sharon Schneider said she measures success by her ability to convert people new to the secondhand game into believers.

"The first purchase is a risk; they're nervous," she said. "I'm asking them to buy used clothes sight unseen over the Internet, so we have to do everything we can to take the risk out of that transaction."

Schneider offers 25 percent off the first purchase and free returns, and wraps shipments cutely so kids feel as if they're opening a present. Stylist picks help guide moms to outfits according to their kids' personality, from adventurous "Riot Girl" to sporty "Team player."

Moxie Jean's customers tend to fall into two categories, Schneider said: urban, green moms who don't want to be wasteful; and small-town moms who want better brands but can't afford to pay full price.

Patty Morrissey, of Chicago's Andersonville neighborhood, who heads Groupon's corporate social responsibility arm, falls into the former category.

She wants to avoid unnecessary consumption, she said, but is too busy to rummage through a thrift store to find cute clothes for her 3-year-old daughter, who is preparing to go back to Montessori school this fall. Morrissey scours Moxie Jean for finds from upscale brands like Mini Boden or Hanna Andersson, she said, before going to those retailers' regular websites to fill in the rest of her daughter's wardrobe. The money she saves goes to more meaningful splurges.

"I'd rather spend money on her music lessons than on another thing to clog up my house," Morrissey said.

Going a step further, a new online service called Swapdom takes buying and selling out of the equation by enabling multiparty swaps through a high-tech algorithm. In essence, if a shopper sees a pair of Nike Little Air Max sneakers on the site that would be ideal for her child's first day of kindergarten, and she has an old bike taking up space in her garage, the Swapdom algorithm will work behind the scenes to arrange a multiparty swap.

The largest multiparty swap arranged by Swapdom since its November launch included 16 people, who offered a hodgepodge of trades from home goods to children's gear to fashion items, said CEO Robin Alter. The model preserves an item's value more than traditional resale does, Alter said, because rather than getting paid part of what something is worth, you exchange an item for another item you want more.

"Bartering as a segment is going to grow massively," Alter predicted. Though the site is free and open, he expects eventually to implement subscription fees and curate the selection.

Rather than steal business, the new online players are peacefully coexisting with bricks-and-mortar resale shops, BDO's Vaughan said. Many people still prefer to touch and feel merchandise, particularly when it's used, he said.

"I honestly think that together, we are normalizing resale," Moxie Jean's Schneider said of the expanding resale landscape.

It feels particularly normal among younger generations, Vaughan said, because they have grown up in a tight economy with budgets top of mind.

Jessie Baker, 16, who is entering her junior year at Highland Park High School, has been shopping at the upscale children's resale boutique Principessa for six years. It has a large variety of Lululemon clothes, which she uses for ice skating practice. Also, Baker likes that she is able to get five back-to-school outfits there for the same price that she could get two at stores like Macy's or American Eagle.